Hydroxypropyl chitosan (HPCS) with different degree of molar etherification (DME, from 0.6 to 6.0) were synthesized and characterized by FTIR, 1H-NMR and elemental analysis. The effect of DME on critical concentration forming lyotropic liquid crystal (C*) was investigated in three solvents (formic acid, dichloroacetic acid and water). C* increased as DME raised but presented a platform at low DME (less than about 2.6), which was explained based on both the amount and the size of flexible substituents. HPCS with DME ≥3.2 were water soluble. C* of HPCS aqueous solutions were evidently lower than those of formic acid or dichloroacetic acid solutions. Typical cholesteric texture appeared in HPCS solutions of all three solvents at proper concentrations.